Cytokines comprise a large family of secreted proteins that regulate cell growth and differentiation of many types of cells. These factors are especially important in regulating immune and inflammatory responses, regulating lymphoid development and differentiation. Cytokines also regulate immune homeostasis, tolerance, and memory. Not surprisingly, cytokines are critical in the pathogenesis of autoimmune diseases such as rheumatoid arthritis, systemic lupus erythematosus, inflammatory bowel disease and psoriasis. Understanding the molecular basis of cytokine action provides important insights into the pathogenesis of immune-mediated disease and offers new therapeutic targets. We discovered Jak3, a kinase essential for signaling by cytokines that bind the common gamma chain, gc (IL-2, IL-4, IL-7, IL-9, IL-15 and IL-21). We found that mutation of Jak3 results in a primary immunodeficiency disorder termed severe combined immunodeficiency (SCID). We received a patent for targeting Jak3 as the basis for a new class of immunosuppressant drugs and established a CRADA with Pfizer to generate a the first generation Jak3 antagonists. One compound, CP 690,550, was produced by Pfizer and found to be effective in preclinical models. The drug is being tested presently in Phase II studies in rheumatoid arthritis, psoriasis and transplant rejection, where it appears to be efficacious. The CRADA with Pfizer was renewed this year and was directed at better understanding the mechanisms of action of this drug. We began by assessing the effect of CP 690,550 on biochemical pathways activated by IL-2. There has been debate over the years regarding Jak-dependent and independent aspects of cytokine signaling. However, to date, we have found that all substrates phosphorylated in response to IL-2 are abrogated by CP 690,550. These include MAPK and AKT activation, as well as STAT activation. We have also determined that CP 690,550 has dramatic effects on T cell proliferation and viability. We next assessed the effect of the Jak3 inhibitor on CD4+ helper cell differentiation. CD4+ T cells have a number of potential fates. In addition to the well-known helper T cell fates, T helper 1 and T helper 2 cells, other fates are now recognized. Regulatory T cells (Treg cells) are an essential subset that maintains peripheral tolerance. Tregs are generated in the thymus from CD4+ T cells (natural Treg cells or nTregs) and can be induced in the periphery (iTreg cells). Both nTreg and iTreg cells express a transcription factor, forkhead box protein 3 (Foxp3). Deficiency of Foxp3 results in lethal autoimmunity in mouse models and in humans;the disease in humans is termed IPEX. An even more recently recognized subset of CD4+ T cells is cells that preferentially produce the cytokine IL-17 (Th17 cells). IL-17 is a major inflammatory cytokine, which appears to contribute to the pathogenesis of many autoimmune and autoinflammatory disorders including rheumatoid arthritis, spondyloarthropathy, multiple sclerosis and inflammatory bowel disease. Of interest is that Th17 cells are thought to be developmentally related to regulatory T cells (Tregs) as both subsets can be induced from naive CD4+ T cells in the presence of transforming growth factor-beta (TGFb-1) in the context of different cytokines. We found that CP 690,550 blocked Th1 and Th2 differentiation. The latter can be explained by effects on IL-4 signaling, which is dependent upon gc/Jak3. We found that the former was also blocked and this was because CP 690,550 blocked IFNg signaling via effects on Jak1. The effects on CP 690,550 on in vivo models of autoimmunity where also examined We have found that CP 690,550 is very effective in attenuating disease in arthritis models. Importantly We have also found that CP 690,550 has actions beyond effects on gc cytokines. , we found reduced expression of IL-17 in arthritic joints. We believe that these effects are an important aspect of the efficacy of this drug. In a collaboration with NIDDK and NHGRI, we also investigated the stereochemistry of CP 690,550 and found that only the 3R, 4R isomer of CP 690,550 potently inhibited Jak3.